The 34-year old, who was recently honoured with a testimonial dinner, was out of contract at Fir Park this summer.
Lasley has been captain of Stuart McCall's team since Stephen Craigan retired two years ago, and Motherwell have finished second in the league in both seasons since he was given the armband.
Lasley becomes the second Motherwell player to commit himself to the club, after 19-year-old striker Craig Moore signed a two-year contract extension on Tuesday.
"After the real high at the end of the season, the summer is always a time of uncertainty, but it has been no secret I wanted to stay here and hopefully we can continue the great run the club has been on," Lasley said.
"I am delighted to sign on again and be a part of what will I hope will be another few successful years. We've managed to tie up most of the squad; the positive thing is the continuity, which should give us a platform to go again next season.
"I've loved life at the club and I think I've made a decent contribution in that time. Most importantly though, I'd like to think there is more to come from me."
McCall stressed the importance of keeping such an experienced player at the club, and the manager is confident Lasley has much to offer.
"I am absolutely thrilled," McCall said. "Keeping Keith at the club was imperative because he is such a huge influence both on and off the park. It's often said in football that a team is only as good as the senior pros. There are few better than Las.
"Although he's in his mid-thirties, he shows no signs of slowing down whatsoever. He's one of the fittest in the squad, won the clubs' Player of the Year last season and was pivotal in the fantastic way things ended.
"We've got some great competition for places in the midfield now which will keep everyone on their toes going into the European and SPFL Premiership season."